11 Things to Consider Before You Buy Cancer Insurance

Find out whether cancer insurance makes sense for you and which companies sell it. You'll also learn how to avoid the pitfalls of cancer health insurance policies.

What would you do if you, your spouse, or your child were diagnosed with cancer? Would your current health insurance plan cover all of the potentially astronomical costs for treatment?

Would you or your loved ones be able to afford your portion of those bills? How about the many bills your plan doesn’t address? Bills like experimental treatments, visits to out-of-network specialists, home health care, or even daily living expenses?

It isn’t unusual for people of all walks of life to ponder these questions, especially considering the prevalence of cancer. It is the second most common cause of death in the US, killing 1,600 Americans every day.

Men in the US have a one in two chance of developing some form of cancer. One in four American men will die from cancer.

American women have a one in three chance of developing cancer within their lifetimes. And a one in five chance of dying from it.

More than 1.6 million new cancer cases will be diagnosed this year. Over 600,000 people in the US will die of cancer during 2017.

Finally, the Agency for Healthcare Research and Quality estimates that the “direct medical costs” tied to cancer (in 2014) were $87.8 billion. More than with half of those costs come from outpatient or office-based care. 27 percent of costs come from inpatient hospital stays.

Fortunately, health insurance companies now offer a plan specifically designed to alleviate these costs. It's called cancer insurance, though some companies offer it in a bundle of critical illness insurance.

Cancer insurance is intended to be a supplemental insurance product that works in conjunction with your primary health insurance plan.

The answers to those questions depend on your personal situation. Factors like your finances, health, and form of cancer all impact whether or not cancer insurance is right for you.

The following pieces of information should help you come to a conclusion one way or another:

This type of insurance is to reduce the price of cancer treatment.

That’s one of the most important things to keep in mind if you’re thinking of buying this kind of insurance.

In other words, the point isn’t to take the place of the benefits provided by your primary health insurance. Cancer insurance is supposed to help you cover some of the expenses your basic policy doesn’t pay for.

Cancer insurance policies can cover a lot of costs.

Depending on the policy you buy, cancer insurance can cover a wide range of both medical and non-medical costs.

These are some of the expenses that tend to be covered by these plans:

Co-pays

Deductibles

Hospital stays (especially lengthy ones)

Visits to out-of-network specialists

Various tests, treatments, and procedures

Child care

Dietary assistance

Travel and lodging when treatment is far away from home

That said, they often won’t cover all of them.

Few cancer insurance policies cover every one of the expenses mentioned above. Even the ones that do may still leave “gaps” in your coverage. That means you could be left holding a bill that you'll be responsible for paying.

Also, some cancer insurance policies don’t cover any of the expenses discussed so far. A few of them, like Aflac, simply offer a specific lump-sum payment that’s after you are diagnosed.

Don’t go into these situations assuming all plans basically offer the same benefits or coverage, because that’s not the case. To understand how different plans work, let QuoteWizard help you find the best cancer insurance plan.

You may not be able to get this kind of insurance if you were diagnosed with cancer in the past.

Some companies will turn you down for a variety of reasons. "It may not be obtainable if you have already been diagnosed with a cancerous condition. Or you are past the age when insurance companies will issue a new policy," says Slome.

At least one provider won't cover you if you’ve been diagnosed or treated for other health issues, too. That includes Hodgkin’s disease, AIDS, AIDS Related Complex, or if you’ve tested positive for HIV.

Take the time to read the fine print before you get too excited about a particular plan.

Pay close attention if you have a family history of cancer.

Cancer insurance doesn’t make sense for everybody. Are you young, healthy, not risk-averse, and without a family history of cancer? You might want to use the money you’d hand over for this type of policy for something else.

Have a number of your relatives been diagnosed with or treated for various kinds of cancer? Cancer insurance may be more worth your while than it is for people without a family history of the disease.

It’s possible your basic health insurance plan is more than enough for you and your family.

If you have an average risk of developing cancer, you may want to rely on your basic health plan. A supplemental cancer insurance plan may be not be needed.

You could also boost or upgrade your basic plan instead of buying cancer insurance. This option will provide you with an even wider range of benefits.

Critical illness insurance may make sense for you, too.

Rather than focus entirely on cancer, this kind of insurance, provides supplemental coverage for other critical illnesses. Heart attack and stroke are the most common. Illnesses like kidney failure, major organ transplants, and even ALS are sometimes covered as well.

Aflac and other cancer insurance providers typically offer critical illness policies. This makes it relatively easy to purchase both types of coverage at the same time, if needed.

Critical illness insurance policies usually pay out a lump sum shortly after a diagnosis has been made. Like some of the cancer insurance policies, the payment can be used for medical or non-medical expenses.

Like cancer insurance, though, critical illness plans have their fair share of critics. Many say there are better ways to prepare for one or more of these illnesses.

The reason: Medicare Part B covers 80 percent of most types of outpatient treatments. That will cover the lion's share of outpatient service for many types of cancer. Medigap can help you pick up the remaining 20 percent of the bill.

You can’t rely on cancer insurance alone.

Before purchasing a cancer insurance plan, make sure your current health insurance is good enough. Cancer insurance is designed to supplement your primary plan. If your primary healthcare plan is poor, you're better off buying a better health insurance rather than adding cancer insurance.

Don’t assume that duplicate coverage will provide you with double the benefits.

Not only can it be costly to double up on insurance coverage, but it’s a waste. Especially when your cancer insurance policy covers the same ground as your basic health plan.

Instead, find a cancer insurance policy that fills in the gaps t left open by your basic health plan. Carefully compare the benefits associated with your basic health insurance plan to any potential cancer insurance plans. Make sure there isn’t too much overlap between the two in terms of what is covered.

If you decide to buy a cancer insurance plan, read the fine print before you sign on the dotted line.

This has been mentioned before, but it can’t be overstated. These plans and policies cover a wide range of costs and treatments and services. You can’t assume what is covered in one plan is also covered in another.

In fact, some only provide you with a single lump-sum payment. Also, some policies have waiting periods that force you to wait weeks and even months before your coverage kicks in. Others stop paying out after a certain period of time.

What Companies Offer Cancer Insurance?

Several insurance companies sell cancer policies. These are the best cancer insurance companies:

Critical illness insurance: Many insurance companies sell critical illness plans that cover a variety of serious conditions, including cancer. Strokes, heart attacks, comas, and more all qualify as critical illness. Specific insurers have their own criteria, though cancer is virtually guaranteed to qualify as a critical illness.

Critical illness plans usually favor a lump-sum payout. Some plans may use a staggered payout. Others provide direct payment to health providers. These policies can help mitigate high out-of-pocket costs. Some policies pay for travel and housing costs if patients need to travel to specialists.

Expense-incurred: Pays for a percentage of covered treatments. These policies usually come with a maximum dollar limit. Most expense-incurred plans require you to pay out-of-pocket, after which your insurer reimburses you. Some insurance companies deal directly with the healthcare provider.

Indemnity policies: Similar to expense-incurred policies, except each treatment has payout limits. Aflac's indemnity plan pays a max of $300 per day for radiation and chemotherapy. And $300 per day for hospital stays.

How Much Does Cancer Insurance Cost?

As a supplemental plan, many cancer insurance policies can cost between $10 to $50 per month. A Cadillac health plan will obviously cost you more. And again, a lump-sum plan with a $5,000 payout will be drastically cheaper than a plan with a $100,000 payout.

With so many different companies and plan types, it's difficult to guess how much a cancer insurance plan will cost. Estimates become murkier when taking your personal factors into account. Fortunately, there are two steps you can take to get better rates.

"It really is important to compare policies and to read the policy definitions carefully," says Slome.

Second, speak with an independent agent. "Since many people never read their insurance policy, we strongly advocate working with an insurance broker who is knowledgeable in the topic. And is appointed with more than one insurance company," says Slome.

Healthcare is extremely complex, especially when it comes to extra coverage like cancer insurance. An independent agent helps you wade through the jargon and find the policy that suits you best.

Keep in mind -- the older you are, the more cancer insurance costs. Why? Cancer rates rise quickly as you age. It gets worse around age 65. Insurers will ask you a few qualifying questions during screening:

Have you been diagnosed with cancer?

Have you been diagnosed with AIDS, HIV or ARC?

Has a doctor advised you to undergo cancer tests?

If your answer is yes to any of those questions, you're unlikely to qualify for cancer insurance.

What Does Cancer Insurance Cover?

While coverage amounts vary, most cancer policies pay for the following:

Surgery

Blood transfusions

Prescription drugs

Ambulance rides

X-rays

Radiation

Chemotherapy

Nursing

Doctors' visits

Hospital stays

More expensive plans may pay for additional benefits like outpatient treatment. These plans also feature less-strict waiting periods and coverage limits.

Lump sum plans are more flexible. Most don't restrict what you can spend the money on. You can spend it on mortgage payments, housing, transportation, groceries, or anything.

Cancer Insurance Limitations

Cancer-related illness: People suffering from cancer are at risk of other diseases. But their cancer insurance plans may not cover those other illnesses. For example, people with lung cancer have an increased risk of catching pneumonia. But cancer insurance doesn't cover pneumonia.

For example, younger people pay a lot less than older people. That's because cancer rates are much lower when you're younger. If you have an excellent healthcare plan, you won't need as much coverage from a cancer insurance plan. Conversely, if you have a cheap plan with limited benefits, you might need a more extensive cancer insurance plan.

If you're buying a lump-sum plan, it should pay for more than just some of your medical care. The payout should also cover your daily expenses.

Ultimately, you should consult with an independent insurance agent. They can help you assess your needs and find the ideal plan. Since they're independent, they won't try to sell you on one specific plan. We can connect you with a health insurance agent to simplify your search.

Frequently Asked Questions

Q: Can I buy cancer insurance after being diagnosed with cancer?

When applying for cancer insurance, your insurer will ask you a few questions. One of those questions is whether you currently have or have ever had cancer. If your answer is yes, you won't be eligible for the policy.

Q: Can I buy cancer insurance if I already have health insurance?

A: Yes. Cancer insurance is designed to work together with your regular health insurance plan. It is not a replacement for your primary healthcare.

Q: Do I need a medical exam to buy cancer insurance?

A: Other forms of health insurance may require a physical exam. But for cancer insurance, you only need to answer a handful of questions about your health and history.

Q: Is cancer insurance worth the cost?

A: Answering this question depends entirely on your personal details. Does your family rely on your income? Do you have adequate savings to deal with medical problems down the road?

What if you buy cancer insurance and never get cancer? Or what if you have been paying for cancer insurance for years, only to get ALS?

You can't predict the future. Cancer insurance will protect you from the unexpected, but it's no guarantee. It might be a great buy for some people – others, not so much. But it's relatively affordable, and you're paying for peace of mind.

If you're still curious whether cancer insurance is right for you, speak with an agent. They can help you assess your risks and explore plan options.

Q: What does cancer insurance pay for?

A: A variety of things. Some plans give you a lump-sum when you're diagnosed, and you can spend that money on anything. Other plans will give you specific amounts to pay for specific medical expenses like chemotherapy and doctor appointments. Some policies give specific amounts for non-medical expenses like housing, food, and transportation.

Remember, each plan is different. For example, one plan may pay for ambulance rides, while another plan won't. Always remember to read the fine print.

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